Senator Quinn: Senator Gold, while I understand that you’re saying that it’s not a large impact, I’m going to respectfully disagree. In some cases, it’s a seven-figure number, and that would be in a medium-sized brewery, such as Moosehead Breweries in Saint John. For certainty and as part of their business planning, if the government is unable to respond in a favourable way, would it not be reasonable to at least convey my concerns to the Minister of Finance that the increase of the alcohol excise tax tied to the inflationary rate will have an unintended consequence that will seriously impact the competitiveness of Canadian businesses and lead to job losses throughout the supply chain?

Hon. Jim Quinn: My question is for Senator Gold. Senator Gold, in 2017, Parliament passed the escalator tax on alcohol products, marking the first time parliamentarians do not have a vote on the annual increase of the excise tax on beer, wine and spirits. Instead, the increase is tied to inflation effective April 1 of every year.

Senator Gold, I applaud the federal government’s initiatives to ease the significant inflationary pressures on Canadians and Canadian businesses. However, with inflation likely being in excess of an average of at least 6%, if not more, the automatic escalator tax will seriously impact the competitiveness of Canadian business. In 2017, I don’t believe that departmental officials and the government expected or planned for the effects of inflation on this escalator clause. This tax ripple through the supply chain will lead to jobs at risk, which I’m also certain will have been an unintended consequence. Why not place a 2% floor on this tax while accruing regional revenue to the federal government, and while giving government initiatives an opportunity to lower inflation without adding fuel to the inflationary fire?

And will the government commit to not imposing an automatic escalator excise tax for 2023?